Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 1256 (ITAT-RAJKOT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 16 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-07-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
28-06-2016
Assessment Year
2006-2007
Appeal Filed On
25-06-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI S.S. GODARA JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ././ ./ ITA NO. 419/RJT/2012 ASSESSMENT YEAR : 2006-07 M/S. SHREENATH SALES AGENCY, RADHE KRISHNA, KRISHNA NAGAR, NR. TELEPHONE EXCHANGE, RAJKOT PAN : AAYFS 8190 F VS ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, RAJKOT ./ ././ ./ ITA NO. 334/RJT/2013 ASSESSMENT YEAR : 2009-10 VIJAYBHAI MULJIBHAI LUNAGARIA, C/O. M/S. VIJAY INDUSTRIES, MORBI ROAD, RAJKOT PAN : AATPL 0214 E VS INCOME-TAX OFFICER, WARD 1(3), RAJKOT / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE(S) BY : SHRI M.J. RANPURA, AR REVENUE BY : 1. SHRI YOGESH PANDEY, CIT-DR 2. SHRI D.R. CHHATRE, SR DR / // / DATE OF HEARING : 28/06/2016 / // / DATE OF PRONOUNCEMENT: 11/07/2016 / // / O R D E R PER S.S. GODARA, JUDICIAL MEMBER :- THESE TWO DIFFERENT ASSESSEES HAVE INSTITUTED THE INSTANT APPEALS FOR AYS 2006-07 AND 2009-10 AGAINST ORDERS OF THE C IT(A)-IV, AHMEDABAD AND CIT(A)-I, RAJKOT DATED 25.05.2012 & 1 0.07.2013, IN CASES NOS. CIT(A)-IV/225R/CC-1/10-11 & CIT(A)-I, RJ T/0364/11-12, CONFIRMING PENALTIES OF RS.2,75,000/- AND RS.4,99,7 55/-; RESPECTIVELY, ITA NOS. 419/RJT/2012 & 334/RJT/2013 SHREENATH SALES AGENCY & VIJAYBHAI M. LUNAGARIA VS . ITO AYS 2006-07 & 2009-10 2 IN PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). BOTH THE LEARNED REPRESENTATIVES STATE THAT RELEVA NT FACTS AND CIRCUMSTANCES INVOLVED IN THE INSTANT TWO APPEALS G IVING RISE TO THE SOLE ISSUE OF CORRECTNESS OF THE IMPUGNED PENALTIES ARE IDENTICAL. WE TAKE UP ITA NO.419/RJT/2012 AS THE LEAD CASE IN THE SE FACTS AND CIRCUMSTANCES. 2. THE FORMER ASSESSEE M/S. SHREENATHJI SALES AGEN CY IS A DEALER OF M/S. BALAJI WAFERS PVT LTD IN AND AROUND RAJKOT. TH E ASSESSEE-FIRM WAS INCORPORATED W.E.F. 01.04.2004. IT WAS EARLIER A PROPRIETARY CONCERN OF SHRI MUKESH V. KHANT. THE DEPARTMENT CONDUCTED A SEARCH AT ASSESSEES PREMISES ON 27.10.2005. THIS LED TO INI TIATION OF SECTION 153A PROCEEDINGS. THE ASSESSEE FILED RETURN ON 31. 12.2006 STATING INCOME OF RS.9,90,290/-. THE ASSESSING OFFICER TOO K UP SCRUTINY. WE NOTICE FROM THE CASE FILE THAT HE WENT ONTO CONDUCT A DETAILED VERIFICATION OF THE ASSESSEES RETURNED INCOME AND ALL OTHER CLAIMS. HE NOTICED FROM SEIZED MATERIAL THAT THERE WAS AN INVE STMENT IN PROPERTY FOR GODOWN PURCHASE AMOUNTING TO RS.2,00,000 SPENT ON CONSTRUCTION. ONE OF ASSESSEES PARTNER SHRI DIPAK KHANT DEPOSED IN THE COURSE OF SEARCH TO HAVE MADE INVESTMENTS OF RS.5,88,474/- IN PURCHASE OF LAND @ RS.6,491/- PER SQ. YDS, ALONGWITH BROKERAGE EXPEN SES, REGISTRATION FEE AND STAMP DUTY ETC. HE ATTRIBUTED SOURCE THER EOF TO ASSESSEES UNDISCLOSED SOURCES OF INCOME. THE ASSESSING OFFICE R TOOK INTO ACCOUNT STATEMENT OF ASSESSEES ANOTHER PARTNER SHR I MUKESH KHANT STATING THAT ITS ENTIRE UNACCOUNTED INCOME HAD BEEN APPLIED IN ITA NOS. 419/RJT/2012 & 334/RJT/2013 SHREENATH SALES AGENCY & VIJAYBHAI M. LUNAGARIA VS . ITO AYS 2006-07 & 2009-10 3 ACTIVITIES OTHER THAN INVESTMENTS IN PROPERTIES. TH E ASSESSING OFFICER NOTICED THIS CONTRADICTION TO TREAT THE ENTIRE INVE STMENT OF RS.8,09,639/- AS AN UNEXPLAINED ONE TO MAKE THE CON SEQUENTIAL ADDITION IN ASSESSMENT ORDER DATED 17.12.2007. HE FURTHER ALLEGED CONCEALMENT AND FURNISHING OF INACCURATE PARTICULAR S OF INCOME TO INITIATE THE IMPUGNED PENALTY PROCEEDINGS U/S 271(1 )(C) OF THE ACT. THE CIT(A) AS WELL AS THIS TRIBUNAL CONFIRMED THE I MPUGNED QUANTUM ADDITION VIDE ORDERS DATED 13.01.2009 AND 02.06.201 0; RESPECTIVELY. 3. THE ASSESSING OFFICER TOOK UP CONSEQUENTIAL PROC EEDINGS. THE ASSESSEE STRONGLY CONTESTED THE PENALTY SHOW-CAUSE NOTICE. THE ASSESSING OFFICER IN PENALTY ORDER DATED 23.12.2010 QUOTED BACKGROUND OF QUANTUM PROCEEDINGS TO TREAT THE ASSE SSEES CONDUCT IN QUESTION AS A CASE OF CONCEALMENT U/S 271(1)(C) OF THE ACT FOR IMPOSING THE IMPUGNED PENALTY AMOUNTING TO RS.2,75,000/-. T HE CIT(A) UPHOLDS THE SAME IN LOWER APPELLATE PROCEEDINGS. 4. WE HAVE HEARD THE RIVAL CONTENTIONS. BOTH THE LE ARNED REPRESENTATIVES VEHEMENTLY ARGUED AGAINST AND IN SU PPORT OF THE IMPUGNED SECTION 271(1)(C) PENALTY AS IMPOSED BY TH E BOTH THE LOWER AUTHORITIES QUA UNEXPLAINED INVESTMENT ADDITION AMO UNTING TO RS.8,09,639/-. THERE IS NO DISPUTE THAT IT IS A SE ARCH CASE. THE ASSESSEE- FIRM HAD TWO PARTNERS. ONE OF THEM ATTRIBUTED SOUR CE OF THE PROPERTY IN QUESTION TO ITS UNACCOUNTED INCOME AS AGAINST TH E LATTER PARTNERS STATEMENT CLARIFYING THAT THE ASSESSEES UNACCOUNTE D INCOME HAD NOT BEEN INVESTED IN PROPERTY PURCHASES. THE ASSESSING OFFICER STRONGLY RELIED ON THESE MUTUALLY CONTRADICTORY STATEMENTS. WE FIND FROM THE ITA NOS. 419/RJT/2012 & 334/RJT/2013 SHREENATH SALES AGENCY & VIJAYBHAI M. LUNAGARIA VS . ITO AYS 2006-07 & 2009-10 4 CASE RECORD THAT ASSESSEE EXPLAINED IN COURSE OF TH E LOWER APPELLATE PROCEEDINGS THAT IT HAD ACCOUNTED FOR THE IMPUGNED INVESTMENTS IN ITS BOOKS AS TO HAVE SPENT THE IMPUGNED SUM ON GODOWN P URCHASES ETC. THE SAME HAS GONE UNREBUTTED IN THE CIT(A)S ORDER AS WE FIND FROM PARA 6 TO 9 IN QUESTION. WE OBSERVE IN THESE PECUL IAR FACTS AND CIRCUMSTANCES THAT THE ASSESSEE HAS EXPLAINED THE S OURCE OF ITS INVESTMENTS IN QUESTION. THERE IS NO DISPUTE ABOUT THE SETTLED LEGAL PROPOSITION THAT QUANTUM AND PENALTY ARE TWO SEPARA TE PROCEEDINGS AND EACH AND EVERY ADDITION MADE IN THE FORMER DOES NOT NECESSARILY LEAD TO IMPOSITION OF THE LATTER PENAL ACTION. WE ARE ACCORDINGLY OF THE OPINION THAT THE ASSESSEE SUCCEED IN EXPLAINING SOU RCE OF THE IMPUGNED INVESTMENTS SO FAR AS THE INSTANT PENALTY PROCEEDINGS ARE CONCERNED. WE DELETE THE SAME. ITA NO. 419/RJT/ 2012 IS ACCEPTED. 5. WE COME TO THE LATTER APPEAL ITA NO.334/RJT/2013 IN CASE OF THE LATTER ASSESSEE. BOTH PARTIES HAVE FAIRLY STATED T HAT RELEVANT FACTS AND CIRCUMSTANCES ARE IDENTICAL TO THOSE INVOLVED IN IT A NO.419/RJT/2012 ACCEPTED HEREINABOVE. WE APPRECIATE THIS FAIR STAN D. THE IMPUGNED PENALTY OF RS.4,99,755/- IS DELETED. 6. BOTH THESE ASSESSEES SUCCEED IN THEIR RESPECTIVE APPEALS. ORDER PRONOUNCED IN THE COURT ON 11 TH JULY, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) (S.S . GODARA) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD; DATED 11 /07/2016 *BT ITA NOS. 419/RJT/2012 & 334/RJT/2013 SHREENATH SALES AGENCY & VIJAYBHAI M. LUNAGARIA VS . ITO AYS 2006-07 & 2009-10 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER, TRUE COPY / // / ( DY./ASSTT.REGISTRAR) , ,, , / ITAT, RAJKOT
